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Major firms caught in scams

Nick McKenzie and Richard Baker

Some of Australia's biggest building firms are implicated in improper dealings with subcontractors and union officials on construction and mining sites across the nation.

On Friday building giant Brookfield Multiplex suspended a Victorian CFMEU delegate from a Melbourne CBD project amid allegations of favours and kickbacks involving at least two subcontractors, following questions from Fairfax Media.

In other key developments in the growing building industry and union corruption saga:

■A West Australian mining project run by Fortescue Metals has been infiltrated by a Hells Angels-linked subcontractor.

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■A secret Victorian government-commissioned inquiry into the involvement of organised crime in the building sector is understood to have found that a small number of senior employees working for Thiess on the state's desalination plant engaged in improper dealings to farm out subcontracts to favoured firms.

■The focus on building companies is set to intensify with the head of the federal government's construction inspectorate, Nigel Hadgkiss, lashing out at building firms for accepting corruption as ''the price of doing business''.

The union delegate at the Brookfield Multiplex site in Melbourne is the third CFMEU official to have been forced from their job recently in connection to allegations of kickbacks and improper dealings.

It is believed a senior site manager allowed a union delegate to influence which subcontractors won work. In return, he and his associates are understood to have received inducements from the subcontractors.

The manager has close ties to several of Victoria's leading building union officials, having entertained them in corporate hospitality suites at sporting events, including the grand prix.

In an exclusive interview, Mr Hadgkiss, who heads the federal Fair Work Building Construction agency, called on the industry to stop allowing corrupt practices to flourish.

He said there was a culture among many building companies of accepting corrupt conduct as the price of doing business.

''As far as I am concerned all building companies should adopt a zero approach to corruption and head contractors should insist on this approach for subcontractors as a condition of their engagement.

''It is vital that building companies report any hint of corruption to the authorities.

''The authorities themselves should be giving an absolute commitment to supporting any person who is prepared to take a stand against this insidious behaviour.''

Mr Hadgkiss would not comment on the findings of the inquiry into organised crime by the agency he used to head, the Victorian Construction Code Compliance Unit, but it is believed his investigators found evidence implicating a small number of senior Thiess desalination site employees in improper behaviour.

Fairfax also believes a Thiess supervisor on the site used his influence to direct work to a subcontractor linked to the Hells Angels bikie gang in return for kickbacks.

Senior building industry figures have revealed several examples of inappropriate dealings, often involving site supervisors or foremen.

It is understood the Australian Crime Commission has also recently received evidence of building company employees receiving a kickback from subcontractors for every worker they employ on a site.

One case detailed in leaked building company emails obtained by Fairfax involves a senior site supervisor getting a kickback of between $5 and $10 an hour for every piece of machinery he placed on the $600 million Queensland government-funded Coal Connect construction project in 2008.

Evidence gathered by Fairfax also reveals that a Perth mining and construction services subcontractor working for a project run by Fortescue Metals sought kickbacks in return for awarding downstream contracts to other subcontractors.

In one case, kickbacks worth $20,000 were paid in return for a $350,000 contract. Fairfax is not suggesting the Fortescue Metals Group was aware of these improper dealings.